BP profits surge by 71% on higher oil prices

BP profits surge by 71% on higher oil prices

BP made $1.6bn in payments relating to the Gulf of Mexico oil spill, which included $1.2bn for the final payment relating to the 2012 Department of Justice criminal settlement.

He added: "Our safe and reliable operations and strong financial delivery have continued into 2018".

The company then faces charges of about $2 billion next year, and then more than $1 billion a year out past 2030.

BP's profits for 2017 total $1.5 billion, and they also managed to net $2.1 billion during the fourth quarter of 2017, Reuters reported. "We're determined to keep delivering our operational targets and maintaining capital discipline while growing cash flow and returns".

The company said Tuesday its replacement cost profit - a number analogous to the net income that US oil companies report - was $2.4 billion in the first quarter, compared with $1.4 billion in the same period a year earlier. To pay for cleanup costs and legal fees, BP was forced to sell off billions of dollars in assets, dramatically shrinking the size of the company.

"The spill payment in the first quarter was "$500 million more than I expected", although that probably means the burden will be lower later this year, said Redburn analyst Rob West, as quoted by Bloomberg.

Chief financial officer Brian Gilvary cautioned that the performance was energised only partly by the oil price recovery. Upstream plant reliability* was 96% for the quarter.

"We have delivered another strong set of results", said Bob Dudley, BP chief executive. Upstream production, excluding Rosneft, was 9% higher, supported by continued ramp up of major projects*. Oil prices fell to as low as about $25 a barrel by 2016, though have recovered strongly since then.

The recovery has been fuelled also by geopolitical tensions, US President Donald Trump's threat to reimpose sanctions on Iran and production problems in Venezuela, Nigeria and Libya.

BP's cash flow - a closely watched measure for oil groups - rose to 3.6 billion U.S. dollars (£2.6 billion) from 2.1 billion United States dollars (£1.5 billion) a year earlier.

"BP shares are in demand... after the company posted a surge in profit that topped analyst estimates", noted CMC Markets analyst David Madden.

Like the handful of big oil firms that have already reported in recent days, London-based BP benefited handsomely from recently lofty oil prices.

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